CME came out with the announcement of launching the forex e-micro futures very recently in the market. The size of the contract has been reduced to one tenth of the normal size so that even a very small investor can avail the opportunity to take part in the forex futures market. This size minimizes the risk from the point of an investor in forex futures market.
The contract size has been reduced to vary small sizes with reduced margins which are proportionate to the investment. This step has been made to draw investors for retail participation. This has been termed Forex E-Micros and expected to be a cost friendly access to the forex futures market for the retail investors with full transparency and respective liquidity of CME. This is to be executed under the strict rules and regulations of CME.
With the new introduction of the Forex e-micro futures contracts, the Chicago Mercantile Exchange (CME) has been able to open a new horizon for the small investors to accumulate new resources to their credit. They can use this investment opportunity with the security of CME and benefit from their investment in the forex futures market. The investors are able to gain access to the global forex market in a cost friendly way. The transactions are electronically processed and are legitimate globally with fixed fees, which are exceptionally profitable for the spot buyers.
Due to their small sizes, individual traders can also take part in these contracts, at the world?s largest forex market place. Mainly the six major currencies will be involved in this FX e-micro futures market, which are Euro/USD, GBP/USD, AUD/USD, JPY/USD, CAD/USD and USD/CHF. The transactions are quoted in over the counter basis so that it becomes simpler for the investors to incorporate into their own systems and necessary portfolios. The allowable margins and exchange charges will be calculated proportionately with the original version and at nearly one tenth of the usual size and cost.
E-micro Forex Futures Now Physically Delivered*
One tenth the standard contract size is the perfect size for you.
Six Currency Pairs. Quoted in Interbank Terms. The Largest Regulated Forex Market. If you would like to trade in a regulated, secure Forex market, get to know our new E-micro Forex futures, traded at CME. One-tenth the size of our standard Forex futures. One-tenth the risk exposure. All of the access to our highly liquid markets.
Available E-micro Forex futures contracts: EUR/USD, USD/JPY, GBP/USD, USD/CAD, AUD/USD, USD/CHF
*The September (U) 2010 E-micro Forex futures contracts are cash settled. However, starting with the December (Z) 2010 contract, CME FX will be migrating the E-micro Forex futures contracts from being cash settled to physically delivered. The December contract will be listed for trading on Sunday, July 25 (trade date Monday, July 26). This will enable active traders to carry larger positions in the E-micros and easily offset them with our standard size FX contracts potentially generating more liquidity and tighter spreads in the E-micro Forex futures contracts.
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Cash Settled Versus Physically Delivered With cash settlement, there is no obligation to make or take delivery of currency. At the expiration of trading there is one final mark to market, which results in a profit or loss to be credited or debited from a traders account. With physical delivery there are currency flows at delivery and traders make and receive deliveries of currencies. However, prior to expiration, traders either need to roll their positions to the next quarterly contract or offset their positions (if they are short, by buying an equal number of contracts in the same currency and contract month, or if they are long, by selling an equal number of contracts).
CME Group is the trademark of CME Group, Inc. The Globe logo, Globex and CME are trademarks of Chicago Mercantile Exchange, Inc. CBOT is the trademark of the Board of Trade of the City of Chicago. NYMEX, New York Mercantile Exchange, and ClearPort are trademarks of New York Mercantile Exchange. Inc. COMEX is a trademark of Commodity Exchange, Inc.
Disclaimer: Trading foreign exchange carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.
Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a currency.
The trading platform provides sophisticated order entry and tracking of orders. All stop-loss, limit and entry orders are guaranteed against slippage except in extraordinary volatile market conditions. Trading on-line, no matter how convenient or efficient does not necessarily reduce risks associated with currency trading.